If you’re new to the small-balance commercial mortgage niche, choosing the lenders you work with might seem like a difficult task. You need to be sure that these lenders are dependable and have your needs as well as the needs of your borrowers in mind.
Here are some tips to help you choose the right small-balance commercial lender for you:
Choose a direct portfolio lender.
While there are situations where you and your borrower could benefit from using a lender that relies on investor funding, direct portfolio lenders are often the safest bet. Because they have a steady source of money to finance deals and don’t sell off their mortgages, these lenders are often more reliable for both brokers and borrowers.
Make sure they’re experienced.
Lenders that have been in business for a long time are a great choice for brokers just getting into the small-balance commercial mortgage niche. These lenders understand the industry, and have proven over the years that they can adapt as necessary. Additionally, these lenders are an excellent resource for both brokers and borrowers who have questions about small-balance commercial mortgages.
Understand their programs and guidelines.
Before you begin working with a small-balance commercial mortgage lender, it’s important to take the time to learn about their programs and guidelines. What do they need to review a scenario? How often do their terms change? Do they have programs that fit the needs of a variety of borrowers? These are all things you need to know.
Learn about their process.
In addition to a lender’s programs and guidelines, you need to understand how they underwrite and close each deal. How long does it typically take for a deal to be approved? What’s the standard turnaround time from commitment to closing? These answers are going to affect both you and your borrowers, so it’s crucial you get a sense of how the lender operates.
Make sure they’ll protect your fee.
When choosing a small-balance commercial mortgage lender, it’s important to be sure that they understand the value you bring to the table as a broker. That’s why you should seek out lenders who allow you to charge an appropriate broker fee and will protect that fee.
The lenders you choose to work with are likely to have a major impact on your success as a commercial mortgage broker, so it’s important to choose wisely. Remember to seek out direct portfolio lenders with experience, good programs and reasonable guidelines, an efficient process and a willingness to protect your fee. Good lenders will help you to close more deals and earn more income.